Robinhood Markets and AppLovin are set to join the S&P 500 index, as announced by S&P Global. This change will take effect before trading begins on September 22, with AppLovin replacing MarketAxess Holdings and Robinhood taking the place of Caesars Entertainment. Following the announcement, both companies experienced a rise of approximately 7% in their stock prices during after-hours trading.
AppLovin, which specializes in advertising technology for mobile apps and games, has seen significant stock performance, gaining 278% in 2023 and over 700% in 2024, although its stock has increased by only 51% this year. The company had previously faced scrutiny from short-sellers and saw its shares drop 15% in December when it was not selected for earlier inclusion in the S&P 500. Additionally, AppLovin made headlines earlier this year with an offer to acquire the U.S. operations of TikTok.
Robinhood, known for its popularity among retail investors, particularly with meme stocks, has also had a fluctuating journey. In June, the company experienced a 2% decline in share value when it was not chosen for the index's quarterly rebalancing. At its annual general meeting, co-founder and CEO Vlad Tenev expressed hope for the company's eligibility for the S&P 500, which has now been realized.
The S&P 500 index is characterized by a significant concentration of large technology firms. The inclusion of AppLovin and Robinhood reflects ongoing trends in the stock market, where news of index inclusion typically leads to increased stock prices due to the demand from fund managers needing to adjust their portfolios accordingly.